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Halliburton to be arraigned on misdemeanor charge of computer fraud on Wednesday

gulf_oil_spill_fire_boats.jpg

In this April 21, 2010 file photo provided by the U.S. Coast Guard, fire boat response crews spray water on the blazing remnants of BP's Deepwater Horizon offshore oil rig. An April 20, 2010 explosion at the offshore platform killed 11 men, and the subsequent leak released an estimated 172 million gallons of petroleum into the gulf. (AP Photo/US Coast Guard, File)
(U.S. Coast Guard file photo, via The Associated Press)

Halliburton Energy Services Inc. is set to be arraigned in federal court in New Orleans Wednesday on a single misdemeanor charge of computer fraud involving employees erasing results of two sets of computer model tests after the BP Deepwater Horizon disaster.

The appearance before U.S. Magistrate Judge Joseph Willkinson Jr., which is expected to be brief, was announced in an order filed Friday in federal court. On Thursday, the Justice Department filed a bill of information outlining a plea deal in which Halliburton agreed to pay the maximum $200,000 fine for the single charge. The firm also separately agreed to donate $55 million to the National Fish & Wildlife Foundation.

The donation is unrestricted and not required to be spent on projects related to the oil spill that followed the blowout of BP's Macondo well. The blowout caused explosions and fire aboard the Transocean Deepwater Horizon floating oil rig, killing 11 workers and causing the ship to sink. The foundation also is to receive $2.5 billion from BP and Transocean as part of criminal plea agreements involving their roles in the Deepwater Horizon disaster, with $1.27 billion reserved for projects in Louisiana.

Halliburton was hired by BP to supply the cement for the Macondo project. BP, the owner of the well, oversaw the work of both Halliburton and Transocean, which leased and manned the drilling rig to the global oil giant.

A federal judge ruled last year that Halliburton was shielded by its contract with BP and is exempt from paying most of the pollution claims resulting from the spill. The company has paid nothing so far, but set aside $300 million last year as a loss contingency related to the civil trial.

At Wednesday's arraignment, Halliburton representatives would be expected to enter a plea of not guilty, which they would then change to a guilty plea at a future rearraignment in front of U.S. District Judge Jane Triche-Milazzo.

The agreement with the Justice Department contained no reference to a controversial issue that arose earlier this year during the civil damages trial. Halliburton lawyer Don Godwin in March said the company found leftover samples of a cement slurry at its lab in Lafayette that later turned out to be from the same mixture used to seal the well.

The material had not been revealed to other parties in the case until then, which could have left the company open to charges involving the omission. However, the plea bargain says the Justice Department will not press further charges against Halliburton unless it fails to continue its cooperation with criminal investigators.

On Friday, the stock of parent Halliburton Co. rose $1.64 to $45.98 per share.

Separately in the civil damages lawsuit Friday, former FBI Director Louis Freeh filed documents under seal with U.S. District Judge Carl Barbier. Freeh is serving as a special master at Barbier's request to investigate allegations of wrongdoing involving two attorneys working for the Deepwater Horizon Court Supervised Settlement Program.

The program oversees the payouts from the multibillion-dollar settlement of economic damage claims against BP. The oil giant has repeatedly claimed that the program is paying out millions of dollars to companies that should not be eligible for settlement payments.

In June, court-appointed claims administrator Patrick Juneau said an initial investigation by his own staff resulted in the termination of attorney Lionel Sutton and Sutton's wife, Christine Reitano, following allegations that a top-ranking staff attorney was given shares of settlement payments from clients referred to the office before the lawyer went to work for the claims office.

Sutton and his wife have denied any wrongdoing.

On July 19, Barbier denied a request by BP for a preliminary injunction halting the payment program until Freeh's investigation was complete.

Freeh's investigation also was to look into any other possible ethical violations or misconduct, to evaluate the program's internal compliance program and anti-corruption controls, and to make recommendations to design and implement additional controls and policies to insure the integrity of the program, according to Barbier's July 2 order appointing Freeh.

Barbier's order hiring Freeh said the special master was authorized to communicate with the court and the parties "without notice, as he deems necessary and appropriate for the performance of his duties."

"If the court asks the Special Master to submit a formal report, the special Master shall submit such report in writing for electronic filing on the case docket," the order said.